IS MATATU BUSINESS PROFITABLE IN KENYA?
What comes to your mind when you hear about the matatu business?
Do you see opportunities, chaos or both?
Well, irrespective of your perception of the industry, the fact of the matter is that this is not a business for the faint-hearted.
It’s a bumpy ride but if you are ready to learn the ropes; then there’s nothing that can stop you from conquering it (business-wise).
In other words, you have to roll up your sleeves and get ready for a ride of a lifetime.
A ride that can take you places if you play by the rules but one that can easily leave you bankrupt if you miscalculate your steps.
With many people relying on public transport to commute, the matatu business is a lucrative industry to invest in.
Most people commit to and from their workplaces using public transport services. Also, students use public transport to go to school, making it a lucrative business.
However, there is high competition and you need to be different to make it in the matatu business.
There are more customers during rush hours like in the morning and evening when people are going and coming from their workplaces.
In this article, I will show you how you can start a matatu business in Kenya.
*How to Start a Matatu Business in Kenya*
Matatu business is capital intensive and it requires proper planning and market research before venturing into it. If you want to invest in the matatu business, this is what you need to do.
*Buy the Right Matatu Vehicle*
You need a durable vehicle with a strong engine to start the matatu business.
The least startup capital for a matatu business in Kenya is Ksh.1,000,000 for a second hand matatu. However, it is best if you have over Ksh.1,500,000 to cater for other expenses.
You can opt to buy a new or second-hand matatu for your matatu business. It is advisable to buy a new car if you have enough capital.
Second-hand vehicles sometimes are problematic, requiring frequent and expensive repairs.
The most expensive spare part is the engine, and when it gets to the end of its life, there’s nothing you can do about it.
Always have some amount in your account sufficient to purchase a good ex-japan engine just in case the need arises. An average engine costs Ksh.300,000 and above.
*How Much is a New 14 Seater Matatu in Kenya?*
You can invest in a 14 seater matatu or a 33 seater matatu. A brand new 14 seater matatu price is around Ksh.2,500,000, while a brand new 33 seater matatu will cost you roughly Ksh.4,500,000.
Toyota and Isuzu are the leading brands for matatus in Kenya you need to consider. Make sure to do the necessary paperwork when purchasing a matatu.
*Brand the Car*
You need to brand a car with the latest graphics and trends in the market. Most public transport users prefer to use flamboyant matatus.
You need to blend colors and graphics well so that they are adaptive for passengers of all ages. Moha Graffics and Fabricators offer quality matatu branding.
*Install Music System*
You need to also invest in a quality music system to entertain passengers. You do not need a loud and noisy music system but a moderate one.
Older adults hate too loud music. As such, ensure that you can control the music well so that it is not too loud.
*Hire Trustworthy Driver and Conductor*
You need to hire a driver and a tout of high integrity and trustworthy. You do not want to hire people who will hide some of your daily earnings and expect you to pay them.
One of the ways to avoid such problems is by joining a matatu Sacco.
With a matatu Sacco, passengers pay while boarding the vehicle at the bus stop. Matatu owners get their monies from the Sacco.
Saccos are involved in the hiring of the driver and conductor, relieving the matatu owner of the challenges.
You can install a GPS tracker to monitor the number of trips the matatu makes each day. You can also use it to ensure that the matatu only plies in the route it is authorized.
*Secure Licenses and Insurance*
Once you have bought a matatu, you need to insure it with the right insurance coverage. It is best to go for comprehensive car insurance to ensure that you are fully covered, even against liabilities.
Shop around to get the best car insurance with the best terms and prices.
You need to take your car to the National Transport and Safety Authority (NTSA) for inspection. They check whether a vehicle is roadworthy and if it meets all the safety measures like safety belts, speed governors and fire extinguishers.
Your car’s driver needs to have a driver’s license, certificate of good conduct, and PSV license. You can get the certificate of good conduct from the Directorate of Criminal Investigations. Make sure your car meets all the necessary regulations and safety measures before going to the road.
*Join a Matatu Sacco*
Joining a matatu Sacco is one of the surest way to succeed in the matatu business. With a Sacco, you can keep your vehicle expenditure low.
It is challenging to excel in the matatu business without a Sacco. Many passengers prefer to use matatus registered with Saccos since they can report the driver or tout in case of any issue.
There are rogue touts that are rude and violent. As such, you can avoid the challenges of having to deal with issues like overloading.
Saccos are also useful when you want to manage your finances well. Many matatu owners lose a lot of money to untrustworthy conductors that do not remit all the monies.
Before joining a matatu sacco, get to know their requirements first. The requirements to join a matatu sacco in Kenya vary from one Sacco to the other.
*Matatu Expenses*
You will need to cater to the matatu expenses like insurance, fuels and repairs. You need to keep good records of the matatu earnings and expenses to determine whether you are making any profits.
Most times, the police and the county council authorities are expenses to your matatu business. They impose expensive fines for minor traffic offenses. Therefore, make sure to comply with traffic rules.
*How Much Does a 14 Seater Matatu Make in a Day? *
How much does a matatu earn per day? On average, a 14 seater matatu makes around Ksh.3,500 in a day. However, depending on route and other factors, a 14 seater matatu can make more than that.
The route your vehicle plies may determine how much you make.
Profitable routes around the city of Nairobi have been identified as: Mwiki – Town, Wangige – Town, Rongai – Town, Kikuyu – Town, Embakasi – Jogoo Road – Town and Kitengela – Town.
Some routes that are quite difficult to operate in mainly because of cartels include Kayole and Dandora.
*Is Matatu Business Profitable in Kenya?*
The matatu business is profitable with the right approach, staff and car. In a busy day, a matatu business can generate revenues of up to Ksh.4,000.
Having an honest crew like the conductor and driver is a sure way to make profits since you will not be losing your earnings.
A new car won’t require frequent and expensive repairs and maintenance hence saving you lots of money.
The route your car is commuting also determines your daily earnings. If it is a busy route, then you are sure to make good profits.
*Disadvantages of Matatu Business in Kenya*
The following are some of the challenges faced by people in the matatu business in Kenya.
*Harassment from police officers.
*Dishonest conductors and drivers that swindle matatu owners’ income
*Wear and tear
*Traffic jams
*Finally*
When starting a matatu business in Kenya, you need to consider daily running costs.
Some of these costs include fueling, wages, insurance, repairs and maintenance and fines when the vehicle is impounded.
Always make sure that at all times, your insurance cover is up to date. If possible, get a comprehensive insurance policy.
Matatu businesss is a bumpy ride but if you are ready to learn the ropes; then there’s nothing that can stop you from conquering it (business-wise).
In other words, you have to roll up your sleeves and get ready for a ride of a lifetime.
A ride that can take you places if you play by the rules but one that can easily leave you bankrupt if you miscalculate your steps.
Justine Nyachieo
Business Man & Mentor
Timothy Angwenyi
Business Consultant
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